Document Content

DECREE

Adjusting the common minimum wage level

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 23, 1994 Labor Code and the April 2, 2002 Law Amending and Supplementing a Number of Articles of the Labor Code;

Pursuant to the Government's Decree No. 203/2004/ND-CP of December 14, 2004, providing for the minimum wage level;

At the proposal of the Minister of Labor, War Invalids and Social Affairs, the Minister of Home Affairs and the Minister of Finance,

DECREES:

Article 1.- From October 1, 2006, the common minimum wage level shall be raised to VND 450,000 per month from VND 350,000 per month as provided for in Article 1 of the Government's Decree No. 118/2005/ND-CP of September 15, 2005.

Article 2.- The common minimum wage level specified in Article 1 of this Decree shall be used as the basis for adjustment of pensions, social insurance allowances and monthly allowances for commune officials who had ceased working, and for the calculation of severance allowances, deductions and other entitlements calculated based on the common minimum wage as follows:

1. To increase by 28.6% pensions, social insurance allowances and monthly allowances already adjusted under the Government's Decree No. 93/2006/ND-CP of September 7, 2006, adjusting pensions, social insurance allowances and monthly allowances for commune officials who had ceased working.

2. To increase the September 2006 allowances by 28.6% for those who enjoy monthly social insurance allowances calculated on the basis of the common minimum wage level.

3. To calculate severance allowances paid on the basis of the number of working months from October 1, 2006 onward to redundant laborers under the Government's Decree No. 41/2002/ND-CP of April 11, 2002, on policies towards laborers who become redundant due to the reorganization of state enterprises, Decree No. 155/2004/ND-CP of August 10, 2004, amending and supplementing Decree No. 41/2002/ND-CP, and Resolution No. 06/2006/NQ-CP of May 4, 2006, on the Government's April 2006 regular meeting.

4. The common minimum wage-based deductions and benefits shall be re-calculated correspondingly.

Article 3.- Funds for adjustment of the minimum wage level for various subjects shall be apportioned by the state budget from the following sources:

1. Administrative agencies and non-business units under ministries, central agencies, provinces and centrally run cities shall each save 10% of their regular expenditures (excluding wage and payments of wage nature) for wage adjustment.

2. Non-business units having revenues shall use at least 40% of revenues they are permitted to retain according to regulations for wage adjustment. Particularly, medical non-business units shall use at least 35% of revenues they are permitted to retain according to regulations (after subtracting expenses for medicines, blood, fluids and chemicals) for wage adjustment.

3. Administrative agencies having revenues shall use at least 40% of revenues they are permitted to retain according to regulations for wage adjustment.

4. 50% of the increased revenue amounts of local budgets.

5. The central budget shall:

a/ Allocate additional funds for the adjustment of the minimum wage level to ministries, central agencies, provinces and centrally run cities which have strictly implemented the provisions of Clauses 1, 2, 3 and 4 of this Article but still lack funds for wage adjustment;

b/ Provide supports to localities which meet with difficulties and cannot balance funds for providing an amount equal to one-third of the minimum wage on average (instead of the current level of VND 120,000 per month) for part-time officials in communes, wards, townships, villages and population groups as provided for in the Government's Decree No. 121/2003/ND-CP of October 21, 2003;

c/ Allocate funds for the adjustment of pensions and social insurance allowances for those who had enjoyed pensions and social insurance allowances before October 1, 1995 (while the social insurance fund shall cover the adjustment of pensions and social insurance allowances for those who enjoy pensions and social insurance allowances from October 1, 2005 onward, including commune, ward and township officials who are enjoying monthly pensions and social insurance allowances under the Government's Decree No. 09/1998/ND-CP of January 23, 1998, and Decree No. 121/2003/ND-CP of October 21, 2003).

Article 4.- Funds for the adjustment of the common minimum wage level for laborers working in companies and enterprises (except foreign-invested enterprises in Vietnam) shall be allocated by such companies and enterprises and accounted as their production or business costs.

For state companies which apply the increase coefficient of not more than twice the common minimum wage level specified in Article 4 of the Government's Decree No. 206/2004/ND-CP of December 14, 2004, and organizations and units entitled to apply the increase coefficient against the common minimum wage level like state companies, the increase coefficient of not more than 1.34 times the common minimum wage level specified in this Decree shall apply.

Article 5.-

1. The Ministry of Labor, War Invalids and Social Affairs shall guide the application of the common minimum wage level specified in this Decree to companies and enterprises operating under the 2005 Enterprise Law (except for foreign-invested enterprises in Vietnam), cooperatives, cooperative groups, farms, households, individuals and other organizations that employ laborers; guide the adjustment of pensions and social insurance allowances for those who enjoy pensions and social insurance allowances as provided for in Clause 1 (except commune officials who discontinued working) and Clause 2, Article 2 of this Decree; guide the calculation of severance allowances according to the provisions of Clause 3, Article 2 of this Decree for redundant laborers under the Government's Decree No. 41/2002/ND-CP of April 11, 2002, Decree No. 155/2004/ND-CP of August 10, 2004, and Resolution No. 06/2006/NQ-CP of May 4, 2006, on the Government's April 2006 regular meeting.

2. The Ministry of Home Affairs shall assume the prime responsibility for, and coordinate with the Ministry of Finance and concerned ministries and branches in, guiding the application of the minimum wage level specified in Article 1 of this Decree to state agencies, non-business units, political organizations and socio-political organizations; and guiding the adjustment of monthly allowances for commune officials who ceased working according to the provisions of Clause 1, Article 2 of this Decree.

3. The Ministry of Defense and the Ministry of Public Security shall, after consulting and reaching agreement with the Ministry of Home Affairs and the Ministry of Finance, guide the application of the common minimum wage level to armed forces.

4. The Ministry of Finance shall assume the prime responsibility for, and coordinate with concerned ministries and branches in:

a/ Guiding the calculation and balancing of funds for the adjustment of the minimum wage level as provided for in Article 3 of this Decree;

b/ Appraising and allocating additional funds for the adjustment of the minimum wage level to ministries, central agencies, provinces and centrally run cities for cases defined at Point a, Clause 5, Article 3 of this Decree, and allocating funds for the payment of pensions and social insurance allowances for those who had enjoyed pensions and social insurance allowances before October 1, 1995, and funds in support of localities meeting with difficulties under the provisions of Point b, Clause 5, Article 3 of this Decree, then summing up and reporting the implementation results to the Prime Minister.

Article 6.-

1. This Decree shall take effect 15 days after its publication in "CONG BAO." To annul the Government's Decree No. 118/2005/ND-CP of September 15, 2005, adjusting the common minimum wage level.

2. The provisions of this Decree shall be implemented as from October 1, 2006.

Article 7.- Ministers, heads of ministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People's Committees shall have to implement this Decree.